Coldcard Mk3 wallet review: Maximum security for your Bitcoin

Hardware wallets are widely considered to be the most secure way for individuals and small businesses to store their cryptocurrencies safely.

Since the first cryptocurrency hardware wallet hit the market back in 2014, there has been an explosion in both the number and types of hardware wallets on the market.

Most of these follow the same formula: support as many cryptocurrencies as possible and offer a good mix of usability and security. But there's one hardware wallet that takes a different approach—that's the Coldcard Mk3, released back in October 2019 by Coinkite.

Coldcard Mk3 review: Design and build

The Coldcard adopts a different design philosophy to most hardware wallets. Rather than opting to remain as small as possible, Coinkite has instead emphasized usability over portability.

The device is around the same size as a credit card, measuring in at around 88 mm x 52 mm x 9 mm, but weighing just under 29g. The Coldcard's case is constructed out of clear plastic, putting its internals on display, and it feels robust enough to take knocks and bangs without damaging its innards.

The Coldcard wallet resembles a small calculator, with 12 buttons and a small 128x64 pixel OLED screen on the front, a microSD slot on the rear and a micro USB port on the top. Unlike many other hardware wallets, the Coldcard Mk3 does not feature a built-in battery and instead draws power through its micro USB port.

While it won't win any awards for its design, the Coldcard Mk3 is certainly not unattractive and is a good blend of form and function.

Coldcard Mk3 review: What's in the box?

Unlike many other cryptocurrency hardware wallets, the Coldcard doesn't come in flashy packaging or even a box at all. Instead, it ships in a simple tamper-proof bag, with a red security seal.

Inside, you will find the Coldcard Mk3 device, a wallet backup card, and a Coldcard sticker—that's it.

You'll need to supply your own micro USB cable and microSD card if you want to use the device to its full potential.

Coldcard Mk3 review: Getting Started

Curiously, the Coldcard Mk3 does not ship with any setup instructions, but details on how to set up the wallet can be found online in the Coldcard quickstart guide.

When first setting up the Coldcard Mk3, you will be asked to confirm that your Coldcard device number matches that printed on the bag it was supplied in.

You'll then need to choose a PIN that can be up to 12 digits long, consisting of a prefix and suffix. The prefix and suffix are entered independently and the Coldcard will provide two anti-phishing words that will be displayed when unlocking the device with your PIN in the future.

Once you've created your PIN, you'll be able to create a new wallet on the device. The Coldcard will display your 24-word recovery phrase on its screen, which should be written down on the supplied wallet backup card and stored in a safe place.

The Coldcard will ask you to verify your recovery phase numbers on the device, after which the setup will be complete.

Coldcard Mk3 review: Features

At $119.97, the Coldcard comes in at a mid-tier price point and is slightly cheaper than some of its direct competitors, including the Ledger Nano X and D'CENT Biometric Wallet.

It's compatible with BIP174—the Partially Signed Bitcoin Transaction (PSBT) format, allowing the Coldcard to sign PSBT files loaded from any compatible wallet.

Thanks to its built-in microSD card slot, Coldcard users can easily create an encrypted backup of their wallet, which can then be used to restore a lost or broken Coldcard if needed. This can also be used to import the wallet into an external wallet, allowing users to access their funds in any compatible wallet.

The Coldcard can be used with a variety of popular wallet clients, including Electrum, Wasabi Wallet, BTCPay, and Bluewallet, or can be used as a completely air-gapped, offline device that simply signs transactions presented on the MicroSD card. It is also multi-signature-compatible, allowing users to set up a multi-signature wallet entirely on the device.

Compared to the previous version of the Coldcard, the Mk3 contains 2.5x more ram, allowing it to handle more complex transactions much faster; it also has an upgraded secure element.

Coldcard Mk3 review: Supported crypto assets

As of March 2020, the Coldcard only supports a single cryptocurrency—Bitcoin (BTC). This is in stark contrast to most other cryptocurrency hardware wallets, like the Ledger Nano X and Trezor One, both of which allow owners to store and manage thousands of different digital assets.

Since the Coldcard is marketed as a Bitcoin-only device, it is unlikely that it will support any other cryptocurrencies in the future.

Although Coldcard doesn't actively build-in support for altcoins, the firmware is open source, and developers can develop their own altcoin integrations if needed.

Coldcard Mk3 review: Ease of use

As one of the larger hardware wallets on the market, the Coldcard Mk3 is definitely less fiddly than many of its competitors. With its numeric keypad, navigating the device is a lot more intuitive than other wallets, too. However, signing transactions is a slightly more involved process than it is with rivals like the Ledger Nano X or Cobo Vault. It's all in the name of security—an area the Coldcard excels in.

The Coldcard doesn't include any built-in wireless connectivity and instead connects to other devices either by USB or using the microSD card as an intermediary.

The Mk3 can be operated by directly connecting it to a computer and signing transactions by using the Coldcard with a compatible software wallet, or it can be used entirely offline by signing transactions that are saved to the microSD card before broadcasting the transaction through a third-party wallet.

Coldcard Mk3 review: Security

When it comes to security, it's safe to say that the Coldcard is one of the most secure Bitcoin hardware wallets available. The device features a huge range of security features and design considerations, all of which make it a veritable fortress for your Bitcoin.

Like many other hardware wallets, the Coldcard Mk3 uses a secure element as the lynchpin of its security. The secure element uses a built-in random number generator to create a 24-word recovery phrase, which never leaves the chip's secure enclave. These secure elements are similar to those used in bank cards, passports, and SIM  cards, and are extremely difficult and costly to hack.

Users can also choose to generate their own seed using dice rolls (entering numbers 1 to 6), while the secure element is also protected by a one-time pad, which protects the secrets even if the secure element is somehow compromised.

The Coldcard Mk3's transparent design isn't just for show; it allows owners to easily see if the device has been modified or tampered with—for example, by installing a wireless transmitter to capture and broadcast the device PIN. On top of the standard PIN, the Coldcard is the only hardware wallet that we have seen that implements a "duress PIN" feature. Once activated, entering the duress PIN into the device will generate a separate Bitcoin wallet which can be used for plausible deniability purposes. Alternatively, a "brick me" PIN can be created, which will automatically destroy the secure element on the device if entered.

This PIN is also associated with a unique anti-phishing phrase, which is shown after entering the PIN. This can be used to ensure that the Coldcard hasn't been replaced with a fake or backdoored replica. Critical parts of the device's circuitry are also covered with epoxy, making them very difficult to access. As a last resort, the words "SHOOT THIS" are printed on the circuit board, showing you exactly where to shoot the Coldcard if you want to completely destroy it.

Coldcard Mk3 review: Verdict

The Coldcard goes above and beyond most of its competitors when it comes to security, offering arguably one of the safest hardware wallet solutions on the market.

However, this does compromise its usability. Since the Coldcard relies on the Partially Signed Bitcoin Transaction (PSBT) format, users will need to create a PSBT file on their Coldcard before they can sign the transaction. This is a more involved process than most other cryptocurrency hardware wallets, which can make the Coldcard less suitable for those that send a large number of payments.

The Coldcard also supports only a single cryptocurrency, Bitcoin, making it unsuitable for those with a diverse cryptocurrency portfolio. Nonetheless, it does give you a great deal of control over your Bitcoin and is one of the few multisig-compatible hardware wallets.

Overall, the Coldcard is a solid choice for those that want extreme control over their Bitcoin and don't mind the hassles that come with ensuring maximum security.